Remittances to post double-digit growth – BPI

MANILA, Philippines – The Ayala-controlled Bank of Philippine Islands (BPI) is projecting a double-digit growth in its remittances this year, better than industry expectations, its top executive said yesterday.

BPI president Aurelio Montinola III said they expect remittances to grow largely due to the additional deployment of overseas Filipino workers as well as the fact that Filipinos are less hit by the global financial crisis than others.

Also yesterday, when asked whether BPI is looking at new bank acquisitions, Montinola revealed that while they are always on the look-out for new opportunities, for now, they have decided to concentrate on what they are doing and are undertaking “organic and mini moves.”

“We are fine in terms of our infrastructure and what we are doing is looking at expanding our existing businesses. For instance, we just launched BPI in Europe,” he said.

The Bangko Sentral ng Pilipinas (BSP) earlier projected total remittances to amount to $17 billion this year or almost the same as last year, but it is now expecting an improvement of up to three percent because of the steady growth reported in the first seven months of the year.

Montinola pointed out that remittances from the Middle East have been very strong for the whole industry with the construction of the mega cities in Saudi Arabia as well as with the growth being experienced in Dubai.

He added that the industry is also experiencing a slowdown in the recession-hit United States. “Remittances from the US are a little bit down but we’re (BPI) okay because of our partnership with Wells Fargo. But as the US recovers, it should be okay,” he said.

Montinola said BPI has been expanding its presence in places where deployment of Filipino workers is increasing, adding that Filipinos are mainly in the service sector where there has been additional deployment worldwide.

The BPI top executive refused to divulge their projections on company numbers for the whole of 2009. The bank, however, earlier reported a 40 percent increase in profits.

Asked about third quarter 2009 expectations, Montinola pointed out that the July to September period is harder to read although the mood is becoming more positive. “But we expect it to track the economic growth and to be in line with national,” he said.

He cited a Management Association of the Philippines (MAP) study on the July-August mood which showed listed companies wanting to be more positive about business and economic prospects.

On the client and non-listed side, Montinola said the news is mixed, adding that people had more activities last year.

Montinola forecasts the country’s gross domestic product growth at 1.5 percent this year and two percent on the high side.

He also noted that for the industry, there has been some “weakness” in loan growth because it was high last year. “For the industry, loan growth has been slowing. But what is important is the capital market. There had been P180 billion in issuances over the past two years. As far as capital acquisition for the Philippines, we are in good shape,” he said.

Remittances from Filipinos abroad grew 3.8 percent in the first seven months of the year to $9.97 billion as the growth in remittances in the Middle East, Asia and Europe offset the decline in remittances from the United States.

BPI senior vice president and overseas banking group head Teresita Tan said part of the increase in remittances is due to the transfer of savings of Filipinos abroad to Philippine banks from foreign banks. “We’ve noticed an increase in savings. Some Filipinos are converting their dollar savings abroad to peso savings here,” Tan said.

Another BPI official revealed that the industry as a whole has been experiencing growth in savings generation. –Mary Ann Ll. Reyes (The Philippine Star)